Income Tax Appellate Tribunal - Pune
Tushar Developers, vs Department Of Income Tax on 23 September, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
Pune Bench "B" , Pune
Before Shri I.C. Sudhir Judicial Member
and Shri D. Karunakara Rao Accountant Member
M.A. No. 106/PN/2011
(Arising out of ITA No. 94/PN/2008)
(Asstt. Year : 2004-05)
Income Tax Officer ... Applicant
Ward-5(3), Pune
v.
M/s. Tushar Developers ... Respondent
129 Bhawani Peth,
Near Palkhi Chowk,
Pune- 411042
PAN : Not available
Applicant by : Shri Prayag Jha
Respondent by : Shri V.L. Jain
Date of Hearing : 23.09.2011
Date of Pronouncement : .11.2011
ORDER
Per I.C. Sudhir, JM
The revenue has preferred the present application pointing out some mistakes in the order dated 31st May 2011 of the Tribunal, which as per the Revenue, are mistakes apparent from record in the order which need rectification under the provisions of Section 254(2) of the Act. The grievance of the revenue is that the Tribunal has decided the issue raised in Ground No. 2 of the appeal following the decision of Nagpur Bench of the Tribunal in the case of ITO V/s. Air Developers (2009), 123 TTJ (Nag) 359 that those residential units wherein area is not exceeding the prescribed limit provided in Section 80IB(10), the claimed deduction can be allowed, whereas as per the decision of Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. M/s. Brahma Associates, ITA No. 1194 of 2010, judgement dated 22nd February 2011, Section 80IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. In other words, the grievance of the Revenue is that deduction is allowable/or not 2 MA . No 106/PN/2011 M/s. Tushar Developers, A.Y.2004-05 Page of 4 allowable on the entire project approved by the local authority and there is no question of restricting the allowance or disallowance of deduction to a part of the project on stand alone or prorate basis. Thus, the revenue has pointed out that non-reference of the said judgement of the Hon'ble jurisdictional Bombay High Court on the issue raised in Ground No. 2 of the appeal by the Tribunal, has resulted in mistake apparent from record in the order dated 31st May 2011 of the Tribunal, which needs rectification u/s. 254(2) of the Act.
2. Contention of the Ld. DR is that while deciding the issue raised in alternative ground i.e. ground no. 2, the Tribunal has failed to appreciate that the issue is fully covered by the decision of Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. M/s. Brahma Associates, ITA No. 1194 of 2010, judgement dated 22.2.2011. Thus there is mistake apparent from record in the order dated 31.5.2011 of the Tribunal which needs rectification u/s. 254(2) of the Act.
3. The Ld. DR referred contents of para nos. 28 and 30(d) of the jujdgement of the Hon'ble High Court in the case of Brahma Associates (Supra) with this submission that the Hon'ble High Court has clearly held that Section 80IB(10) allows deduction u/s. 80IB(10) to the entire project approved by the local authority and there is no question of allowing deduction to a part of the project. The ld. DR contented that non-application of this ratio laid down by the Hon'ble jurisdictional High Court by the Tribunal while directing the A.O to allow the claimed deduction u/s. 80IB(10) on such residential flat/row houses (of the project) wherein prescribed area limit i.e. 1500 sq.ft. has been properly complied with, is a mistake apparent from record in the order of the Tribunal, more specifically in para no. 18 of the order.
4. The Ld. A.R., on the other hand, submitted that there is no mistake apparent from record in the order of the Tribunal as no such ratio as contended by the Ld. D.R has been laid down by the Hon'ble jurisdictional High Court in the case of 3 MA . No 106/PN/2011 M/s. Tushar Developers, A.Y.2004-05 Page of 4 Brahma Associates (Supra). The Ld. AR submitted that the Hon'ble High Court has held the above stated order of the Tribunal in restricting Section 80 IB(10) deduction only to a part of the project, as unjustified since under the facts and circumstances of the case before it, the Hon'ble High Court was of the view that the assessee was entitled for claiming deduction on the income earned on selling out the entire housing project comprising of residential and commercial area occupying more than 10% of the built up area. The ld. AR argued that under these circumstances, it would be incorrect to pick up a sentence or set of words or observation from the said judgement of the High Court to conclude that the High Court has negated proportionate deduction. The ld. AR placed reliance on the following decisions :
1) Nodi Exports vs. ACIT (12 DTR 1) (ITAT Delhi)
2) CIT vs. Sun Engineering Pvt. Ltd. (107 CTR 209) (SC)
3) Madhav Rao Jiwaji Rao Scindia Bahadur & Ors vs. Union of India (1971) 3 SCR 9
4) Lachman Dass Bhatia Hingwala Pvt. Ltd. vs. ACIT (330 ITR 243) (Delhi)
5) Blue Star Ltd. vs. CIT (217 ITR 514) (Bom)
6) CIT vs. Ramesh Elec. & Tdg. Co. 203 ITR 497 (Bomb.) We find that the issue relating to Prorata claim u/s. 80IB(10), with reference to the residential portion of the Housing Project raised in ground No. 2 of the appeal has been adjudicated upon by the Tribunal simply following the decision of Nagpur Bench of the Tribunal in the case of ITO Vs. Air Developers (2009), 123 TTJ (Nagpur) 359. Thus, undisputedly, the decision of the Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. M.s, Brahma Associates & Ors. (Supra) to which this Bench of the Tribunal is bound with has remained to be discussed for its applicability on the issue which, in our view, has resulted into a mistake apparent from record in the order dated 31st May 2011 of the Tribunal. We thus are of the opinion that para Nos. 17 & 18 of the order of the Tribunal dealing with Ground No.
4 MA . No 106/PN/2011 M/s. Tushar Developers, A.Y.2004-05 Page of 4 2 needs rectification under the provisions of Section 254(2) of the Act. We thus recall the order of the Tribunal on ground No. 2 i.e. para No. 7 & 18 of the order with direction to the Registry to fix the appeal for hearing on ground No. 2 on an earlier possible date with advance notices to the parties.
5. The application is accordingly allowed.
The order is pronounced in the open Court on 14th November 2011.
Sd/- Sd/-
(D. KARUNAKARA RAO) (I.C. SUDHIR )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Pune, dated the 14th November, 2011
US
Copy of the order is forwarded to :
1. The Applicant
2. The Respondent
3. The CIT-II, Pune
4. The CIT(A)- II, Pune
5. The D.R. ITAT "B" Bench, Pune
6. Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Pune